LectureHop: Take That JSachs
Written by Bwog Staff
In the battle between brains and brawn, Bwog’s been choosing brains a lot lately (mostly because we’re too lazy to hit the gym). Today is no exception. Read on as Bwog’s economic rivalries expert Zach Kagan reports on William Easterly’s critique of Jeff Sachs.
The audience of William Easterly’s talk on Friday was looking forward to a catfight. Easterly, an NYU developmental economist and vocal critic of Columbia’s own Jeffery Sachs, has a reputation for snarkiness, and he did not disappoint. His hour-long talk was peppered with wry jokes and offhand remarks, mostly targeting those who disagreed with him. After one particularly vehement retort, Easterly decided he had had enough and wisecracked, “I reserve the right to be autocratic in this talk, even to professors.” He came to Columbia with the intention of poking the Earth Institute’s proverbial beehive, and succeeded.
The goal of Easterly’s lecture, “Skeptics Vs. Autocrats: The Next Battle in Development” was to dispel the idea of the Benevolent Autocrat – the idea that the economic policies crucial to development are best implemented by a person with complete economic control. Despite recent democratic uprisings in the Middle East, Easterly claimed that the majority of the audience would leave the lecture still firmly believing in the “myth of the Benevolent Autocrat.” Such is its hold on the mind of developmental economists. Easterly argues economists are too willing to accept this notion, and challenges the perception there is a clear link between economic development and autocracy.
Autocracy is attractive to economists because of something he calls “The Guy Named Bob” theory. The idea is that developmental experts do their research, and give their ideas to some guy named “Bob,” who then implements policy in order to “achieve the end of poverty”– a not-so-subtle reference to Sach’s bestseller. In a democracy, however, a legislative system prevents the existence of one ultimate arbitrator of economic policy; this “Bob” exists exists only in autocracies. Easterly claims “The Guy Named Bob” theory doesn’t work in practice because development requires innovation, and innovation cannot be predicted. It requires experimentation and local knowledge, both things that are used to a much greater effect by the market’s invisible hand than by a centralized economic planner.
Though data suggest that some autocratic nations are experiencing rapid growth, many more autocracies are economic failures: for every Hu Jintao you have many more Robert “Bob” Mugabes. Democracies have much more consistency in their growth rates; no democratic nation has experienced negative growth comparable to that of some autocratic nations.
Despite the trends in the data, Easterly believes that economists and policy makers still hold onto the idea of the Benevolent Autocrat because of a few fundamental cognitive biases. Many more papers are written on autocratic successes than failures, so we tend to believe that autocratic governments are generally successful. We also see that the highest growing economies are autocracies, so we assume that this is true for all of them, which simply is not the case. However, in the Q & A session, Easterly backed down from his position somewhat, admitting that autocrats can impose good policy but that requires them to have very certain knowledge of the problem.
By the end of the talk, economists in the audience were clearly tired of Professor Easterly’s shtick. SIPA Professor Arvind Panagariya made it clear early on that he resented Easterly’s implication that Columbia economists and their partners in the World Bank were supportive of autocratic regimes. It was clear based on the crowd’s response that Columbia is not in favor of dictatorships. However many students argued that a strong economic autocrat could impose necessary policy that may never be accepted in a democratic system. Easterly gave a cheeky response: if students agree with him it’s because he was so persuasive, and if they disagree they must be suffering from a cognitive bias. Either way he wins.